Many Colorado business owners are successful because of their optimism, which allows them to see opportunities, even in negative situations, and take advantage of market conditions. While this ability leads many business owners to achieve great success, it can also lead the same business owners to struggle with debt.
From time to time, business owners may feel the need to accumulate debt in order to make it through a tough situation. While the business owner may believe there is an opportunity that will provide success, enabling them to pay back the debt, this success does not always come, while the debt remains.
In these instances, businesses struggling with debt may find it necessary to file for Chapter 7 bankruptcy. For example, one business recently filed for Chapter 7 less than a month after it was forced to cancel an annual concert event. The company, which had booked a number of musical entertainers to play the concert, had to cancel the show due to lack of ticket sales.
In its bankruptcy petition less than one month later, the company listed debts of more than $250,000, compared to assets of less than $100,000. Among those listed, the creditors were each of the artists who had been scheduled to perform at the concert.
Typically, when filing for Chapter 7, the petition must set out a schedule of assets and liabilities, as in the case above. The petition must also provide a statement of financial affairs, a schedule of current income and expenditures and a schedule of executor contracts. These are contracts that have yet to be fulfilled, as was the case with the musical acts above.
Once all of this information is placed in the petition, the process of asset liquidation may begin. While this is not necessarily pleasant for anyone to go through, the process can leave business owners with the optimism that the debts will be wiped clear, and they will be allowed to start over again, looking for future opportunities and success.
Dealing with debt and trying to recover from it can be a difficult and complicated time and process. Those unsure of their options and if they qualify should contact a profession in order to understand their situation better and be more knowledgeable about their options.
Source: MLive, "Chesaning Showboat files for federal Chapter 7 bankruptcy less than month after cancelling concert event," Andy Hoag, Aug. 9, 2013